FB: Baird Cuts Target to $33, Mobile Won’t Offset Desktop Slowdown

By Tiernan Ray

R.W. Baird Internet analyst Colin Sebastian today reiterates an Outperform rating on shares of Facebook (FB) while cutting his price target to $33 from $37, writing that while he is positive on the overall shift to mobile use of the Web, nevertheless, “We still do not believe this will offset slower growth in advertising on the core site,” though he’s still “constructive on the long-term opportunity.”

Sebastian cut his estimate for Facebook for next year to $6.3 billion in revenue and 63 cents EPS from a prior $6.4 billion and 65 cents.

That’s despite the fact his digging has come up with mostly positive things to say about mobile:

Our checks with advertisers and service providers suggest that Facebook is seeing more progress of late in monetizing mobile apps through sponsored stores and offers in the news feed (good news) […] Given the similarities between Promoted Tweets on Twitter and Sponsored Stories on Facebook, it appears that branded advertisers are more quickly adopting these ad formats, and this bodes well for both companies over time, in our view.

Sebastian’s remarks on Facebook are part of a broader report updating his views on Amazon.com (AMZN), Google (GOOG), and eBay (EBAY). With respect to Google, he raised his price target to $850 from $750, writing that “Motorola becomes less of a distraction” to investors, and that “competitive concerns are abating, we believe that a stabilization in search pricing remains another potential catalyst in Q4,” echoing remarks from Canaccord Genuity’s Michael Graham this morning, who ale raised his price target.

“Based on data from Performics, we note that mobile search is accelerating, which also bodes well for the holidays.”

Sebastian raised his price target on eBay to $58 from $47 and raised his price target on Amazon to $300 from $250.

Facebook shares today are down 15 cents, or 0.7%, at $20.13, while Google shares are up $3.67, or 0.5%, at $752.78.

Update: The shares this afternoon have reversed course and notched up some gains. The stock is now up 32 cents, or 1.6%, at $20.61.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.